SLCL to set up Rs 264-cr plant

To be operational by June next year

Kanpur-based textile company Shri Lakshmi Cotsyn Ltd (SLCL) is setting up a new plant as per an investment plan worth Rs 264 crore. The new plant, which will be operational by June 2006, marks the company's entry into denim, terry towel, bed linen and cotton suiting segment.

The company will raise Rs 182 crore through term loans, Rs 62 crore through equity and the remaining Rs 17 crore through internal accruals to fund the investment plan. The addition of the new plant will see the total capacity of the company rise to 62.5 million meters per annum.

The company hopes to achieve a turnover of Rs 646 crore in the first year of the new unit's operation in 2006-07. MP Agarwal, chairman and managing director of the company told Business Standard that at 90 per cent capacity utilisation of the new plant the company will be able to touch Rs 1000 crore as turnover.

"The new plant will enhance out product line to include denim, wide width sheeting, cotton suiting and terry towels which we had left untouched earlier. By 2009 we hope to achieve a turnover of Rs 1000 crore," Agarwal said.

The existing range of the company consists of blended, quilted and embroidered fabrics, fusible interlining and specialized technical textile fabrics for defence and para military forces.

The new plant which is spread over an area of 48 acres will have a capacity to produce 20 million meters of denim, 12 million meters of wide width sheeting, 6 million meters of cotton suiting (heavy weight bottom wear fabric) and 3000 tonnes of terry towel in a year. The company is also setting up a captive power plant and a yarn dying unit which has a peak capacity of 1500 metric tonnes per annum.

"The captive power plant and yarn dying capacities will compliment our new plant and lend self sufficiency to it. We are basically targeting the export market and are confident that exports will contribute almost 50 per cent of our total turnover by 2007," Agarwal added.

Currently exports contribute Rs 40 crore to the company's Rs 282 crore turnover.